Supplementary Protection Certificates (SPCs)

The Healthcare team at Avidity has in-depth and high level experience of SPC matters for clients. SPCs are becoming increasingly important for extending the life of IP protection for biopharma and pharma drug products. In general, an SPC can give up to five years of additional protection at the end of the patent term when a drug is likely to be at its most commercially valuable. In some cases, a paediatric extension is also available, adding a further six months. These opportunities can be of very considerable commercial value.

The current form of the SPC Regulation was promulgated by the EU Commission as far back as the early 1990s. However, in the last five years or so there have been important developments in the SPC area, brought about by an increasing number of referrals of legal questions to the Court of Justice of the European Union (CJEU), the highest EU court. Since SPCs are an aspect of EU law (although Switzerland adheres to a parallel system on its own), when the interpretation of any aspect of the EU SPC Regulation is in question, the courts in EU member states can refer questions regarding such interpretation to the CJEU. The rulings of the CJEU are binding interpretations of the law on all member states (and are also followed by Switzerland for reasons of conformity).

Although a relatively short piece of legislation, the SPC Regulation is lacking in precision in some of its requirements, and interpretation of some of its provisions has proven to be very controversial. For example, Article 3 sets out certain requirements before an SPC can be granted. In particular, a basic patent must be ‘in force’ on the date of SPC application and must protect the product which is the subject of the SPC. It should be clearly understood that SPCs are not simple extensions of the patent term, but are an additional IP right added on at the end of the patent term which cover medicinal products to the extent that such are ‘protected’ by the basic patent. An SPC gives the right to sue in relation to the medicinal product in question within the limits set by the basic patent when it was in force. The obtaining of an SPC and the way it can be used are thus two very different things. For an SPC to be granted it is also necessary for there to be a Marketing Authorisation having valid effect in the EU in relation to the medicinal product in question.

The requirements of Article 3 therefore give rise to the need to ensure that the definition of the medicinal product to be used in an SPC is consistent both with that which is ‘protected’ by the basic patent and also with that for which Marketing Authorisation has been granted. Since the CJEU has made it clear that what is ‘protected’ by the basic patent cannot simply be determined by an infringement test, and, further, since Marketing Authorisations are granted for particular medicines and their use in a particular indication, complex quasi-algebraic questions can arise when choosing an SPC product definition. Sometimes this is straightforward, but many occasions arise in which it is not.

The team at Avidity has been involved in strategizing SPC approaches, as well as in routine SPC filings and prosecution throughout Europe. Avidity has also taken part in various cases which have stretched the boundaries of what is possible and available to SPC applicants. In short, Avidity is always on the lookout for ways in which this valuable form of IP protection can be best secured and provide as much additional term of protection as possible. As indicated above, many issues in SPC protection arise from interpretation of the meaning of Article 3 of the SPC Regulation, and the various requirements for an SPC applicant which this sets out. It is often of absolutely critical importance in a difficult case to make appropriate judgement for which legal precedent may be small or even lacking entirely.

For example, the Avidity team was responsible for persuading the UK Intellectual Property Office of a method of calculating the SPC term which would generally result in a few days’ longer protection. Subsequently, this method of term calculation has been expressly approved by the CJEU as the right way of determining SPC terms. The team at Avidity has also been involved in SPC activity for both of the only two conjugated antibody biopharma drugs having current European marketing approval. In one of those cases Avidity pursued a strategy of defining the SPC product (the better to represent the client’s interest) by defining only an active part of the conjugated molecule as the SPC product. This was a very new approach which the CJEU have subsequently confirmed to be correct. Avidity has also argued for an interpretation of Article 3 of the SPC Regulation which does not require the filing of an SPC application whilst the basic patent is still pending. This interpretation required a teleological interpretation of the words ‘in force’ when referring to the basic patent, arguably consistent with the willingness to adopt a teleological interpretation of provisions of the SPC Regulation which the CJEU has on occasion been inclined to demonstrate. This issue remains highly controversial and unresolved.

That the complex issues thrown up by the SPC Regulation can be of considerable commercial value as well as legal uncertainty for practitioners can be illustrated by some aspects of European competition law jurisprudence. For example, AstraZeneca found themselves liable to pay a fine running into tens of millions of euros for a breach of competition law as a consequence of their desire to pursue SPCs, in particular in Germany against an awkward fact pattern, and an unfortunate level of inconsistency in some respect between their SPC cases in different countries. Equally, Pfizer, having acquired certain patent rights in Italy filed a divisional application in a perfectly legitimate manner in order to provide a basic patent from which an Italian SPC could be derived for a certain drug. Notwithstanding that these actions were certainly allowable under the patent law, the potential exerting of such SPC rights against generic drug manufacturers has been held by the Italian Supreme Administrative Court to be an abuse of competition law.

For all the above reasons, and others beyond the scope of these comments, pursuing SPC protection emphatically can require thinking outside of the box, and this suits Avidity’s desire to get it right and to go into unexplored areas where necessary in the interests of its clients.

“We retained the healthcare team at Avidity IP to help our company address a multitude of difficult and complex legal and strategic intellectual property issues related to a highly valuable portfolio of European patent rights. The team impressed me with their willingness to understand the business context, as well as their competence and originality in addressing the multitude of interrelated scenarios including oppositions, prosecution and interpretation of SPCs in light of evolving European law and considerations, coordination of pan-European enforcement and validity matters, and consideration and awareness of related U.S. proceedings. I would recommend Avidity for anyone dealing with such complex and strategically important intellectual property matters.”

(Christopher Stone, Vice President and General Counsel, PDL BioPharma).

“Richard Bizley and Avidity IP are first-rate, leading experts in EU SPC practice, helping us navigate the complexities of SPC law and providing pragmatic and invaluable counsel with our client needs in mind”